PSALM universal charge hikes could drive up August electric bills

By Myrna M. Velasco – July 29, 2017, 10:00 PM

from Manila Bulletin

The regulator-approved hike in the universal charges of Power Sector Assets and Liabilities Management Corporation (PSALM) will likely drive up electric bills of Filipino consumers in August billing month.

That as the Energy Regulatory Commission (ERC) had finally approved the true-up adjustments in the universal charges for stranded debts (UC-SD) of PSALM amounting to P24.198 billion covering cost recoveries over the 2011-2012 stretch.

In separate line item in the electric bills, that shall amount to P0.0265 per kilowatt-hour (kWh), according to PSALM. The ERC order on this was dated July 7 this year but had just been formally issued recently.

“The collection will be spread over a nine-year period with a rate of P0.0265 per kWh,” the state-run company has reiterated, emphasizing that the UC-SD will start manifesting in the consumers’ bills in the August billing period.

That will be on top of the additional collections that the company will recoup for UC on stranded contract costs (UC-SCC). And when both universal charge cost recoveries would be consolidated, they could reach as high to P37 billion.

For the UC on stranded contract costs in particular, the supplemental collections given go-signal by the ERC had been at P12.878 billion – for cost recoveries on calendar years 2011, 2012 and 2013.

“PSALM was ordered to extend its collection for another 10 months,” the company has noted, relative to its pass-on of UC-SCC in the electric bills.

As explained, the amount shall “be recovered at the existing UC-SCC rate, thus, there is no increase or decrease in the UC-SCC rate for the 10-month collection is only an extension.”

Depending on the swing of other rate components in the bills for August, the UC hikes may still be offset, especially if the generation charges had eased from the last supply month.

PSALM further indicated to media that “the impending collection of the stranded debt and stranded contract cost portions of the universal charge in the amount of around P37 billion will relieve PSALM from additional borrowings this year.”

PSALM Officer-in-Charge Lourdes S. Alzona opined that “early recovery of said charges will partially infuse the needed monetary source to pay maturing obligations without resorting to financing.”

She stressed that had the state-run firm been pushed into fresh round of loan procurements, such could just have been “a palliative solution that further widens PSALM’s stranded debts in the long run because of refinancing charges.”